Proposal to Expand Exclusion for Gain on Small Business Stock

Currently, gain on the sale of qualified small business stock—stock in a C corporation that’s not engaged in listed service business—is 100% tax free if the stock has been held for more than 5 years. The Small Business Investment Act of 2025 (H.R. 1199) would change the rules to allow a 50% exclusion for stock held more than 3 years and a 75% exclusion for a stock held more than 4 years; the 100% exclusion would continue to apply to stock held more than 5 years. If this becomes law, it would apply to stock acquired after the date of enactment. #IdeaoftheDay